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Consumer confidence rebounds in June from a six-month low

New Zealand consumer confidence rebounded from a six-month low in June, supported by a strong economy.

The ANZ-Roy Morgan consumer confidence index rose to 131.9 from 127.6 in May. A reading above 100 indicates optimists outnumber pessimists.

New Zealanders are feeling more buoyant on the back of a strong economy where the prospects of higher wages loom as employment increases and the cost of living is supported by low inflation, ANZ said. A report yesterday showed the economy expanded at a 3.3 percent annual rate in the first quarter, the fastest pace in eight years, while last week the Reserve Bank raised interest rates for a third time and signalled more hikes ahead.

"Sentiment is very solid under the bonnet," ANZ Bank New Zealand chief economist Cameron Bagrie said in a note. "That's an incredibly healthy sign; amidst rising interest rates there are wider influences that are supporting confidence."

The current conditions index rose to 127.5 from 123 last month as households felt better off financially compared to a year ago and still considered it to be a great time to buy a major household item. The future conditions index increased to 134.9 from 130.7 as those expecting good economic conditions in New Zealand over the next 12 months rose to a net 37 from a net 30 last month.

"All measures - headline sentiment, current and future conditions - are well north of the 100 benchmark, something of a breakeven mark for wallets being opened," Bagrie said "At these levels, wallets are not only open; the credit card is in hand."

Expectations of inflation remained unchanged from last month at a 21-month low of 3.1 percent.

Household sentiment strengthened in four of the five regions and was topped by Wellington to reach its highest level since January 2007. Meantime, confidence eased marginally in Canterbury, drifting down to a five-month low.

(BusinessDesk)